The headline in Bloomberg this weekend reads, “The Bear Market Has Nearly Been Erased, Fewer Than 20 Months After It Began.”
Bear markets don’t come around often. However, when they do, they tend to cause some catastrophic damage to many investors. That’s why it is important to know how often bear markets occur and how long they will last. The average length of a bear market is 289 days or about 9.6 months. By that measure, the bear market has already been over for some time.
The thing about bear markets is that they tend to be much shorter than bull markets. However, bear markets tend to have more violent moves, while bull markets move slower and grind upward in prices. One thing we look closely at is the ratio of insider buyers to sellers. By that measure, bulls should keep their enthusiasm in check. Insider selling has never been a very useful indicator for me, and there was little to get excited about last week from insider buying.
Name: John Donovan
Position: Director
Transaction Date: 2023-07-19 Shares Bought: 548 Average Price Paid: $457.07 Cost: $250,476
Company: Lockheed Martin Corp (LMT)
Lockheed Martin Corporation is an international security and aerospace business specializing in the research, design, development, production, integration, and maintenance of high-technology systems, products, and services. In addition, the firm offers managerial, engineering, technical, scientific, logistical, system integration, and cybersecurity services. Defense, space, intelligence, homeland security, and information technology, especially cybersecurity, are the primary areas of concentration. The firm provides goods and services with military, civil, and commercial applications to domestic and foreign clients, with the primary customers being US government agencies. The organization operates in a complicated and ever-changing global security environment. The goal of 21st Century Security is to combine new and current systems across all domains with sophisticated, open-architecture networking and operational technologies, allowing forces to become more flexible, adaptable, and unexpected.
Donovan served as CEO of AT&T Communications, LLC, a wholly-owned subsidiary of AT&T Inc., from August 2017 until his resignation in October 2019. He was AT&T Inc.’s chief technology officer from April 2008 until January 2012. He was AT&T Technology and Operations’ chief strategy officer and group president from January 2012 until August 2017. Before joining AT&T, Donovan was the executive vice president of product, sales, marketing, and operations at VeriSign Inc. He was also the chairman and CEO of inCode Telecom Group Inc., where he helped cellular operators throughout the globe establish their strategy, and a partner at Deloitte Consulting, where he headed America’s telecom practice. Donovan is the President’s National Security Telecommunications Advisory Committee’s chair, a director of the worldwide cybersecurity business Palo Alto Networks, and the author of many books on advanced networking and organizational leadership.
Opinion:
Oppenheimer’s debut in the movies this week should remind viewers that we live in a dangerous world. Nuclear saber-rattling is back with a vengeance. Russia repeatedly threatens vague nuclear response warnings about crossing a nebulous redline. Apparently, no one takes this seriously based on the price of Lockheed Martin’s stock, but the risk of an accident, a miscalculation, or a mistaken vector between the Chinese J-20 and the F-35 next-generation stealthy fighters jets could lead the world into a nuclear weapon accident or worse. You would never know this by looking at the largest defense company, Lockheed Martin, piss poor stock performance.
Donovan keeps buying, and so do we. Eventually, the market will recognize that every free world nation that can scrape together the hundreds of millions of dollars it takes wants to buy all the F-35 jets they can. The world is a dangerous place and getting more dangerous by the day, it seems.
Lockheed beat consensus expectations for Q2 and raised full-year guidance, and importantly, its book-to-bill was a solid 1.77 times in the quarter, yet several analysts lowered their price. Citi is a buyer of the stock given rising global defense budgets, accelerating growth for the company, and management’s focus on shareholder cash returns. Lockheed said it was committed to $4B in shares repurchased with $2.7B in the second half. ” I’ll give you my LMT shares when you pry (or take) it from my cold, dead hands.”
Name: Dustin A. Moskovitz
Position: President, CEO, & Chair/10% Owner
Transaction Date: 2023-07-19 Shares Bought: 240,000Average Price Paid: $22.90 Cost: $5,496,513
Company: Asana Inc. (ASAN)
Asana is a work management tool that assists organizations in orchestrating work ranging from everyday chores to cross-functional strategic projects. Asana is used by over 139,000 paying clients to manage anything from product launches to marketing campaigns to company-wide goal setting. The platform structures unstructured work, providing clarity, transparency, and accountability to everyone in an organization—individuals, team leaders, and executives—so they know who is doing what and by when. The Asana was founded after seeing firsthand the rising issue of work around work. They saw the coordination issues that Facebook encountered as it grew. Instead of working on projects that produced results, they spent their time in status meetings and extensive email threads attempting to determine who was in charge of what. The company mission is to help humanity thrive by enabling the world’s teams to work together effortlessly.
Dustin Moskovitz is the co-founder and CEO of Asana. Dustin is the CEO of Asana and is committed to delivering a product that enables teams all around the globe to interact seamlessly, as well as driving the company’s award-winning culture. Dustin co-founded Facebook and served as the company’s first Chief Technology Officer and VP of Engineering before launching Asana. Dustin studied economics at Harvard University before joining Facebook full-time in 2004.
Opinion:
Name: Lawrence E Golub
Position: Chairman/10% Owner
Transaction Date: 2023-07-20 Shares Bought: 200,021 Average Price Paid: $15.00 Cost: $3,000,315
Company: Golub Capital BDC 4 Inc.
Name: David Golub
Position: President, CEO/10% Owner
Transaction Date: 2023-07-20 Shares Bought: 200,021 Average Price Paid: $15.00 Cost: $3,000,315
Company: Golub Capital BDC 4 Inc.
Golub Capital BDC 4 Inc is an externally managed, closed-end, non-diversified management investment firm that has decided to be regulated as a business development company. The business was founded to make investments and produce current income and capital appreciation by investing largely in one-stop loans and other senior secured loans of U.S. middle-market companies often sponsored by private equity groups. GC Advisors constructs these one-stop loans as senior secured loans, and the business obtains security interests in the portfolio company’s assets to serve as collateral for the repayment of these loans. This collateral is often in the form of first-priority liens on the assets of the portfolio firm.
Mr. Lawrence Golub has been the Chairman of the Board of Directors since November 2009. He is also the Chief Executive Officer of Golub Capital and a member of the Investment Committee of investment advisor GC Advisors LLC. Mr. Golub is involved in philanthropic and civic organizations. Mr. Golub serves on the Stanford Interdisciplinary Life Sciences Council and the Stanford Impact Labs Advisory Board. Mr. Golub formerly served as Managing Director of Bankers Trust Company. Mr. Golub received his AB degree magna cum laude in economics from Harvard College. He earned an MBA from Harvard Business School, a Baker Scholar, and a JD from Harvard Law School, an editor of the Harvard Law Review.
Mr. Golub is the President and CEO of Golub Capital BDC. He also serves on the Investment Committee of the investment advisor, GC Advisors LLC, and is the President of Golub Capital. Mr. Golub is a member of the Michael J. Fox Foundation for Parkinson’s Research’s Founder’s Council, where he was the inaugural board Chairman and a long-time director. Mr. Golub is on the Advisory Council of the Stanford Graduate School of Business. He is also an Association of Marshall Scholars’ Director’s Circle member. Mr. Golub graduated from Harvard College with an AB degree magna cum laude in Government. He earned an MPhil in International Relations from Oxford University as a Marshall Scholar and an MBA from Stanford Graduate School of Business as an Arjay Miller Scholar.
Opinion:
Name: Michael L. Hollis
Position: President
Transaction Date: 2023-07-19 Shares Bought: 1,142,542 Average Price Paid: $10.50 Cost: $11,996,691
Company: HighPeak Energy Inc. (HPK)
Name: Jack Hightower
Position: Chief Executive Officer/10% Owner
Transaction Date: 2023-07-19 Shares Bought: 952,380 Average Price Paid: $10.50 Cost: $9,999,990
Company: HighPeak Energy Inc. (HPK)
Name: John Paul Dejoria
Position: 10% Owner
Transaction Date: 2023-07-19 Shares Bought: 6,571,428 Average Price Paid: $10.50 Cost: $68,999,994
Company: HighPeak Energy Inc. (HPK)
Name: Jason A. Edgeworth
Position: Director
Transaction Date: 2023-07-19 Shares Bought: 5,700 Average Price Paid: $10.50 Cost: $59,850
Company: HighPeak Energy Inc. (HPK)
Name: Larry Oldham
Position: Director
Transaction Date: 2023-07-19 Shares Bought: 28,500 Average Price Paid: $10.50 Cost: $299,250
Company: HighPeak Energy Inc. (HPK)
Name: Steven W Tholen
Position: Chief Financial Officer
Transaction Date: 2023-07-19 Shares Bought: 9,500 Average Price Paid: $10.50 Cost: $99,750
Company: HighPeak Energy Inc. (HPK)
Name: Rodney L Woodard
Position: Chief Operating Officer
Transaction Date: 2023-07-19 Shares Bought: 130,000 Average Price Paid: $10.50 Cost: $1,365,000
Company: HighPeak Energy Inc. (HPK)
Name: Keith E Forbes
Position: Vice President and Controller
Transaction Date: 2023-07-19 Shares Bought: 14,000 Average Price Paid: $10.50 Cost: $147,000
Company: HighPeak Energy Inc. (HPK)
HighPeak Energy is an independent crude oil, and natural gas company focused on acquiring, developing, and producing crude oil, NGLs, and natural gas reserves. It was founded in Delaware on October 29, 2019. The Company’s assets are mainly situated in Howard County, Texas, a part of the Midland Basin’s northeastern region and home to a lot of crude oil. The Signal Peak area is located in the south, and the northern Flat Top area is where the Company has two sizable contiguous land positions focusing on the Howard County region of the Midland Basin, in particular, HighPeak Energy. The Company’s assets include rights, titles, and interests in natural gas and crude oil properties, most of which are situated in Howard County, Texas, a Midland Basin region rich in crude oil.
Mr. Hollis worked as President and COO of Diamondback Energy, Inc., an oil and gas producer focused on the Permian Basin, from January 2017 to September 2019 before joining HighPeak. Before that, he had been COO since 2015 and Vice President of Drilling. Since 2011, Mr. Hollis has also been a member of the boards of directors for Diamondback and Viper Energy Partners LP. Before his employment at Diamondback, Mr. Hollis had positions of increasing importance in production, completions, and drilling engineering at ConocoPhillips and Burlington Resources Inc. He was also a drilling manager at Chesapeake Energy Corporation. Mr. Hollis earned a Bachelor of Science in Chemical Engineering from Louisiana State University in 1998 and has more than 20 years of experience in the oil and gas industry.
Mr. Hightower has been running E&P platforms in the oil and gas business for more than 49 years. From 2011 until 2013, Mr. Hightower held the positions of Chairman, President, and CEO of Bluestem Energy Partners, LP. Mr. Hightower held the positions of Chairman, President, and CEO of Celero Energy II, LP, from 2006 to 2009, as well as Celero Energy, LP from 2004 to 2005, before founding Bluestem. Mr. Hightower started Celero after being chairman, president, and CEO of Pure Resources, Inc., which grew to become the 11th largest independent E&P company in North America that was traded on a public stock exchange. Unocal made a bid for the Pure Resources shares it did not already hold in October 2002.
John Paul Jones DeJoria is a self-made millionaire and philanthropist from the United States, best known as a co-founder of the Paul Mitchell hair care brand and The Patrón Spirits Company. HighPeak Energy Inc. is a company that John owns 10% of. After high school and honorable service in the United States Navy, John Paul tried everything to make ends meet, from selling encyclopedias and working as a caretaker to pumping petrol. He was even homeless at one point in his life. Before becoming an independent consultant, John Paul brought his expertise to various hair care and cosmetic firms.
Jason A. Edgeworth has been an Investment and Asset Manager for the John Paul DeJoria family office since 2020, responsible for diligence, execution and investor relations. From 2013 until 2020, Mr. Edgeworth was an Executive Director of Investment and Merchant Banking at the U.S. Capital Advisors LLC. Mr. Edgeworth’s responsibilities included due diligence, execution, and investor communications for public E&P and midstream companies, focusing on equity market transactions such as initial public offerings, follow-on equity offerings, at-the-market equity offerings, and preferred equity offerings. Mr. Edgeworth earned a Master of Arts in International Relations from the University of St. Andrews in 2008. Mr. Edgeworth has the designation of Chartered Alternative Investment Analyst.
Larry C. Oldham has been a member of the Board since August 2020 Talon Resources Partners LLC and HighPeak Energy, Inc., as well as being the Manager of Oldham Properties Ltd., the Operating Partner of Mountain Capital LLC, a member of the Permian Basin Landmen’s Association, a member of the Permian Basin Production Association, the Manager of Gateway Royalty IV LLC, the Manager of Gateway Royalty V LLC, and the Manager of Gateway Royalty III LLC. Furthermore, Mr. Oldham has advised Gateway Royalty II LLC and Gateway Royalty I LLC since 2014 and 2012, respectively. Mr. Oldham graduated from West Texas State University in 1975 with a Bachelor of Business Administration in Accounting and was a 2012 Distinguished Alumni Award winner.
Steven W. Tholen, the founder of Sdl&T Energy Partners, LP, is the CFO and principal Accounting Officer for Pure Acquisition Corp. and the Chief Financial Officer of HighPeak Energy, Inc. He previously served as President of Sdl&T Energy Partners, LP, Chief Financial Officer and Vice President of Ranger Oil Corp., Chief Financial Officer, Treasurer, and SVP-Finance of Harvest Natural Resources, Inc., Executive Vice President-Finance of Fieldco Construction Services, Inc., and Treasurer and Manager-Business of Coterra Energy, Inc. He has a bachelor’s degree from St. John’s University and an MBA from Daniels College of Business.
Rodney L. Woodard, the founder of Celero Energy Co. LP, Titan Exploration, Inc., and Victerra Energy LLC, is the Chief Operating Officer and Executive Vice President of HighPeak Energy Partners LP, the Chief Operating Officer and director of Pure Acquisition Corp. The Chief Operating Officer of HighPeak Energy, Inc. Mr. Woodard previously held the positions of President and Chief Operating Officer at Victerra Energy LLC, Chief Operating Officer and executive Vice President of Celero Energy LP, Vice President-Reserves & Evaluations at Pure Resources, Inc., and Division Manager-West Texas at Delta Drilling Co., Inc. He attended The Pennsylvania State University for his undergraduate studies.
Keith E. Forbes is the Chief Accounting Officer, Vice President, and Controller at HighPeak Energy, Inc. He formerly worked at HighPeak Energy, Inc. as Vice President and Controller. Pittsburg State University awarded him an undergraduate degree.
Opinion:
Name: John D Jr Harkey
Position: Director
Transaction Date: 2023-07-14 Shares Bought: 100,000 Average Price Paid: $8.52 Cost: $852,000
Company: Lions Gate Entertainment Corp. (LGF-B)
Lionsgate includes top-tier motion picture and television studio activities coordinated with the STARZ premium global subscription platform to provide customers worldwide with a distinctive and diverse portfolio of entertainment. The company’s 17,000-title library and rich collection of classic film and television properties support its film, television, subscription, and location-based entertainment operations. The company uses three reportable business sectors to manage and provide operating results: media networks, motion pictures, and television production. The production of film and television content and the domestic and international theatrical release of the company’s films both experienced delays. Even though most film and television production has resumed, the industry still experiences production interruptions depending on the local environment.
Mr. Harkey has served as the principal and founder of JDH Investment Management, LLC, an investment advice business, since 2007, and the chairman and chief executive officer of Consolidated Restaurant Operations, Inc., a full-service and franchise restaurant company, since 1998. Mr. Harkey is also a co-founder and board member of Cessation Therapeutics, a developer of vaccines for fentanyl, heroin, and nicotine addictions, since June 2018. He was also a co-founder of AveXis, Inc., a biotechnology business, from 2010 until it was bought by Novartis AG in 2018, and served as executive chairman from 2010 to 2015. Mr. Harkey earned a B.B.A. in Business Honours from the University of Texas at Austin, a J.D. from the University of Texas School of Law, and an M.B.A. from Stanford Graduate School of Business.
Opinion: Now that both writers, actors, and hotel workers are on strike, finally, maybe finally Lions Gate insider buying may mean something.
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Insiders sell the stock for many reasons, but they generally buy for just one – to make money. You’ve always heard the best information is inside information. Everyone who has any experience at in the stock market pays close attention to what insiders are doing. After all, who knows a business better than the people running it? Officers, directors, and 10% owners are required to inform the public through a Form 4 Filing any transaction, buy, sell, exercise, or any other within 48 hours of doing so. This info is available for free from the SEC’s Web site, Edgar, although we subscribe to SECForm4 as they provide a way to manage and make sense of the vast realms of data. I’ve tried a lot of vendors. SECForm4 is one of the smaller ones, but I like supporting Frank. He is not arrogant. He’s helpful and has great prices. He also trades on his own data, so I like people that eat what they kill.
The bar is different from selling because the natural state of management is to be a seller. This is because most companies provide significant amounts of management compensation packages as stock and options. Therefore, with selling, we analyze unusual patterns, such as insiders selling 25 percent or more of their holdings or multiple insiders selling near 52-week lows. Another red flag is large planned sale programs that start without warning. Unfortunately, the public information disclosure requirements about these programs, referred to as Rule 10b5-1, are horrendously poor. Also, planned sales that pop up out of nowhere are basically sales and are seeking cover under this corporate welfare loophole. I also generally ignore 10 percent shareholders as they tend to be OPM (other people’s money) and perhaps not the smart money on which we are trying to read the tea leaves. I say generally because some 10% shareholders are great investors. Think Warren Buffett, Icahn, and others
Of course, insiders can also be wrong about their Company’s prospects. Don’t let anyone fool you into believing they never make mistakes. Do your own analysis. They can easily be wrong, and in many cases, maybe most cases have no more idea what the future may hold than you or me. In short, you can lose money following them. We have, and we curse aloud; what were they thinking!
We like Fly on the Wall for keeping up with what events might be happening, analysts’ comments, and whatever else could be moving the stock. Dow Jones news service is an essential tool but many services pick up their feed like they do Bloomberg. For quick financial analysis, it’s hard to beat Old School Value.
A big callout to my assistant Ambreen who sets up this conversation by listing the notable buys that I’ve identified. She probes the 10k for a reasonable description of the business. I’ve found that to be the most accurate and succinct place to find out what a business actually does. The websites and marketing material are just that, poorly disguised marketing material for many. I should know that better than most if you at my past involvement in building the 1st websites for many Fortune 500 companies.
No one tracks and understands insider behavior better than us. We’ve been doing it religiously since 2001 when I quit being an insider myself and devoted myself full-time to managing my personal investments. Needless to say, past good fortune is no guarantee of future success. We may own positions, long or short, in any of these names and are under no obligation to disclose that.
This blog is solely for educational purposes and the author’s own amusement. Don’t rely on this blog. Think of the blog as part of my personal investment journal that I am willing to share with the DIY investor. We welcome your comments on our analysis, but please do your own research. Investing with The Insiders Fund is for qualified investors and by Prospectus only. Nothing herein should be construed otherwise. THE INSIDERS FUND prefers to invest in companies at or near prices that management has been willing to invest significant amounts of their own money in, but we have no requirement to do so. We also invest in many companies in anticipation of future insider buying or with the expectation that there is none at all.
You can be an insider, too– by clicking here
Prosperous Trading,
